Industry experts say manufacturing nutraceuticals (the word is an amalgamation of two words--nutrition and pharmaceutical) is not new in India. Srisailen, Business Head & Head Corporate Communication of Alliance Biosciences, a nutraceutical manufacturing company, shares, “It has been in practice from last three decades. But of late, the growing trend to lead healthy lifestyle has fueled the business’ growth. Today, this industry offers a thriving opportunity.” Alliance Biosciences P. Ltd. (ABPL) is situated in a beautifully laid out scenic location in Pondicherry, which is also called the French Riviera of the East. Besides nutraceuticals, Alliance Biosciences manufactures probiotics for various companies across the globe. The company is based in southern India.
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Nutraceuticals is any element that is a food or a part of a food and provides medical or health benefits, including prevention and treatment of disease. They are healthcare products and are formulated and taken in fixed dosage form such as capsules, tablets, etc. Nutraceuticals comprise a wide range of products including dietary supplements for example vitamins, minerals, co-enzyme Q10, saffron, ashwagandha, safed musli, etc. Major players in this space are Ranbaxy, Piramal Healthcare, Himalaya, etc.
The business of manufacturing nutraceutical can be started with a start up investment of Rs 70 lakh to Rs 1 crore. Contract manufacturing is another way of starting this business where the contract manufacturer produces nutraceutical product on behalf of other companies. The precise term for contract manufacturing is outsourcing. In India, both modes of nutraceutical business model is available. Nutraceutical manufacturing process generally consists of the following steps:
1. Sourcing raw materials,
2. Warehousing raw materials or raw ingredients,
3. Measurement of ingredients for inclusion in such products,
4. Blending the ingredients into a mixture,
5. Tableting or pouring the blended mixture into appropriate dosage form,
6. Bottling and packaging the product with tamper-proof features and sending the packaged product to a distribution point for delivery to retailers. Nutraceutical places special emphasis on quality control and conducts inspections throughout the manufacturing process, including raw material verification, homogeneity testing, weight deviation measurements and package quality sampling.
Know-how of nutraceuticals manufacturing is close to pharmaceuticals manufacturing. The third party manufacturing nutraceutical or contract manufacturing is better as the third party nutraceutical regulation is not as stringent as it is in pharmaceutical. The third party manufacturer/contract manufacturer is generally responsible for sourcing raw materials, producing the products, hiring laborers for the manufacturing work and finally, dispatching the product to the end user. Third party manufacturer or the contract manufacturer convinces their clients that they would be in a better position to produce quality product as they can keep the manufacturing cost low and therefore can garner larger profit share.
Where to get raw ingredients
To source the raw ingredients, a nutraceutical manufacturer can contact companies who solely supply raw materials to pharmaceuticals and to different health product manufacturing organisations.
Growth Drivers
There are a host of factors fueling the growth of nutraceutical market in India. Increased knowledge of the nutrition supplement products, the increase in disposable income, changing lifestyle, etc. are few factors fostering the nutraceutical market growth in India. Besides, Drug Controller’s plan to allow certain restricted drugs (like morphine tablets), not only in pharmacies but also at grocery shops and department stores, is also helping the unrestricted spread of healthcare products. This is a significant shift in government attitude towards the healthcare needs and aspirations of the common man. New entrants in this business segment are trying to capitalize this new development so that they can establish their footprint into manufacturing nutraceuticals.
| Factfile |
| Market size of nutraceutical is around 4000 crore, growing at 17 percent CAGR. |
| Take Aways |
| Academic qualification in B. Pharma required |
| USP |
| Profit potential is huge as the market is growing fast. |
| Must Do |
| Adhere to the rules of Central Drugs Standard Control Organisation. |
Market size and growth
Nutraceutical market in India is growing much faster than the prescription market which was always considered to be the backbone of Indian healthcare industry. Senthil Kumar, Director, Alliance Biosciences informs, “The Indian nutraceutical market is around Rs 4000 crore and it is growing at 17 percent CAGR (Compound Annual Growth Rate). Due to the competitive nature of the market, the business has good potential to earn even 200 per cent growth.”
Overall Challenges
A new entrant should know the basic essentials of drug regulation act of India. These regulation acts compel manufacturers to achieve and maintain certain quality standard of their product. Besides, there are several consumer forums in our country which can act against the nutraceutical manufacturers if the products are not produced at per set standard. Pricing is another concern for a new entrant, as to tap the nutraceutical market one may need to keep the product prices reasonably low while the cost of manufacturing incurs higher. Next challenge is distributing the products to the end users. Finding proper distribution channels to distribute the product is a difficult task. In some cases, the new entrant may have to offer freebies to convince
the distributors.
Despite these, the fact remains the same. The future of nutraceutical business in India is promising. It holds the capability to earn good return for their manufacturers.
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written by links of london charms, March 18, 2011
written by Indalytics Advisors Private Limited, March 09, 2011
The report discusses the following:
•Definition of the sector
•Size and structure of the sector
•Factors that will drive the business
•Regulations governing the sector
•Latest trends in the sector
•Business opportunities in the sector
•Risks associated with the sector
•Outlook of the sector
To know more about the report, please copy and paste this URL in your browser: http://indalytics.com/wellness.pdf
You can also visit us to know more about the report and buy it
-Indalytics Advisors
http://www.indalytics.com/
written by VISWA RAJ, January 25, 2011
do you know, wellness can be the next generation business, where we can find a huge market of more than 5000 crores!!! but now the industry is dominated by the giant AMWAY group and they are some what doing in the best available method. i.e. direct marketing and by that the customer also earns. so if we have a plan to enter into this field, be ready with a better plan than the existing.
viswa raj
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thanks
sanjay